@Mimi1944 wrote:
......when my husband and I pass, will the property be taxed when it is sold......
When your husband and you pass, your children will take the property at a basis stepped up to fair market value on the date of the last of you two to die. Any sales proceeds will be divided three ways unless the three of them decide to make different arrangements.
In which state is the property located? Is the life estate deed a Lady Bird (Enhanced Life Estate) deed (if you know)? Otherwise, a life estate typically results in a future interest (a remainder) which would be a gift to the remaindermen and would most likely have to be reported to the IRS on Form 709.
See https://www.irs.gov/instructions/i709#en_US_2023_publink16784xd0e649
[note that the annual exclusion is not available for a gift of a future interest]
